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Cramer on BloggingStocks: Yesterday's technology, yesterday's news |
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| Jun 18, 2008 09:22 AM UTC |
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Tracked Blogger
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Via BloggingStocks:
Filed under: Industry, Newspapers, Google (GOOG), Market matters, New York Times'A' (NYT), Tribune Co. (TRB), Gannett Co (GCI), Stocks to Sell, Cramer on BloggingStocks  TheStreet.com's Jim Cramer says massive debt at the newspapers means they no longer work as businesses. Maybe newspapers don't work as businesses. The shocking 10% workforce reduction announced this week by McClatchy (Cramer's Take) (NYSE: MNI), formerly the best-run chain out there, is a reminder that all of these companies have borrowed too much money and don't generate the cash flow to make it work. McClatchy, with an 8% yield, is showing signs of collapsing under its own weight, something that has been exacerbated by Wall of Shame performer Gary Pruitt, a man who is still, amazingly, the CEO. But all of this was totally predictable. I have never seen an industry attract so many buyers with so much debt and so little equity. Take Tribune (Cramer's Take). Sam Zell's a smart guy. He let the newspaper employees do the heavy lifting when he bought the Tribune company. That was so smart. He will be out very little if the deal fails. The workers will be out their retirement money. That was a smart deal -- unless you work there -- but I have spoken against that deal so many times I am sick of talking about it. McClatchy could have weathered this downturn, instead of -- it is a bit unthinkable, but I think it will happen -- defaulting on its debt, if it hadn't been determined to buy a bunch of properties for much more than they are worth. The New York Times (Cramer's Take) (NYSE: NYT) and Gannett (Cramer's Take) (NYSE: GCI) spent a lot of money, but they didn't have to buy back stock. Gannett's 6% yield isn't tempting in the least. Continue reading Cramer on BloggingStocks: Yesterday's technology, yesterday's news Permalink | Email this | Comments<map name="google_ad_map_145-1229017"><area href="http://imageads.googleadservices.com/pagead/imgclick/145-1229017?pos=0" shape="rect" coords="1,2,367,28" /><area href="http://services.google.com/feedback/abg" shape="rect" coords="384,10,453,23" /></map> 
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